Why am I Broke?

Introduction

Wondering why you’re always broke and easily run out of cash even if you get good pay? You’ll find your answers here. Being broke has always been a normal thing among people, especially young adults but people find a way out of it as there is no one way to kill a rat. People get broke as a result of so many reasons.

Sometimes, not because they do not have money but because they really do not know how to handle or manage money. Surprisingly, people with jobs who earn monthly or on a weekly basis are people who always complain about being broke. They tend to wonder why exactly they easily and quickly run out of cash. The answer is simple, they have it right within them.

What is Being Broke?

According to the Merriam Webster dictionary, being broke is the state of not having any money. People tend to have money but within a very short period of time, it appears they have nothing left with them they wonder why money comes slowly and leaves quickly.

Often times, when people find out they are broke, they resolve to search for friends and family to ask for cash, not to invest in an asset, but to consume. Thereby, owing to a certain amount of debt even before their income arrives. When this happens, they start clearing off previous debts and get back to the same cycle of being in debt again. This keeps happening and they wonder why they always get broke. The answers are below.

Why am I broke?

You keep wondering why you earn a fat pay and can’t even have an enviable saving to boast of. The reasons you are broke are 100% your doing and it is only a problem when you find out and refuse to have a change of mind and habit. Some of the reasons we end up broke are:

Impulsive Spending: Some people tend to spend like they have all the money in the world when the man with “All the money in the world” (well, that’s a movie title) did not spend as much, even when his grandson was kidnapped, it took him weeks to finally pay the huge ransom that was asked for. He spent his money acquiring artworks that turned out to be huge assets.

Spending on wants rather than spending on needs will always leave you without cash. If you can learn to spend your money only on the things you really need, then you won’t always be broke. When you look closer, you will find out that the things you spend money on, you either will not be needing it for anything or you have purchased it before, thereby making even the newly purchased a waste. Spend wisely and you will still have some cash.

No Financial Budget: The moment there is no financial budget, an amount of money is exhausted even before you can give account. It is important to state exactly what you’ll be spending an income on.

A budget that spells out exactly how much you’ll spend on feeding, saving up for a car, saving up for an asset, for a vacation, setting aside some money for bills, etc. Whatever it is you need money for. This way you will be sure to not spend impulsively. With a set budget, being broke will no longer be a norm.

They Purchase Depreciating Assets: Spending money on cars, yacht, furniture, devices etc. and every other item that will not give financial returns is a major source of being broke. Especially when the amount of money spent is huge. These assets will always depreciate over time, and it is only wise that if they must be purchased, they should yield returns after a period of time.

No Investment Plan: If only you will learn to invest wisely and consistently, the issue of being broke will no longer be a thing. Invest in a business, be a shareholder, etc. Having a huge amount of money in a savings account will certainly not make you rich. Let your money work for you.

No Emergency Plan: This is probably another reason you’re broke. If there is no amount of money set aside for emergencies and one comes up, you find yourself taking loans and becoming a debtor again. To avoid being broke and being a debtor, ensure to have an emergency plan.

Single Stream of Income: A single stream of income can be draining. It only limits you and the awesome opportunities your money can venture into. Invest, start a business, utilize a skill and see how meeting your needs will no longer be a problem.

People end up broke because they make poor money decisions. To get out of this, you want to learn to set good financial goals, try to not spend just because you want to maintain a lifestyle not meant for you or to impress a set of people.

Study a book on finance, have a daily, weekly and monthly budget and see things turn around in your finance. Practising a good habit can be difficult, especially when it has to do with money, but it takes discipline. Practice these few and you won’t have to ask yourself the question “Why am I broke?”